How to Read a Credit Card Merchant Statement – 5 Ways to Categorize Fees

Read your trade message and find out the rates and fees you are paid, for example you can play “Where’s Waldo?”. One reason is that there are almost as many different reporting formats as there are merchant acquiring companies. In addition, due to the competitive nature of the industry, many monthly reports do not fully disclose rates. And sometimes they are completely hidden.

I know from banks that don’t even send a report. If a merchant wants information about what they paid for, they need to log into an online account to find it.

It’s war there!

One reason for this is competitiveness. You have to remember that credit and debit cards are part of the $ 2 trillion industry. Money is like a magnet – it pulls in Most traders are constantly contacted by competing processors trying to force them to replace them, promising “lower prices” and so on.

So, in order to keep a salesman from another processor, he does not take away the trader – some processors make the most difficult step for business to their sales agents by analyzing the trader’s statement and making apples-to-apples comparisons.

Nevertheless, there are still some key keys to keep in mind when reading your statement. Here’s what I’m looking for when analyzing a trader’s statement that:

  • One: The structure of prices – How was the account created? Which pricing model does it use? Is it used in tiered steps (eg Tier 3; Tier 4, etc.), or – Do you use Interchange Plus? (NOTE: Most traders use a tiered pricing model, which I think guarantees they are too high. There are other pricing structures, but tiered pricing is the most common)
  • Two: Monthly charges (sometimes called “other”) – after that I look at the monthly fees. These may include: application fee; monthly service fee; Account Maintenance Fee (you usually only see one of them, though I’ve seen two – or you can see the equivalent charge but use a different term) PCI fee; shipment charge; and gateway or access charges. Various but not monthly fees can also be shown here, such as the annual fee or semester.
  • Three: Processing fees – here will be the discount rates. If you are subject to tiered pricing, the best statements will print a detailed list of “qualified”, “intermediate” and “unskilled” (3-tier) rates. If you use Interchange Plus, you will see a list of all the different cards you take, followed by the actual card exchange rate, dpi (rebate per item) and processor mark-ups expressed as a basis for points and per transaction fee (or per commodity based on the term used in its list).
  • Four: Authorization Fees – This is where you will find the fees applicable to VISA and MC. They will appear as access, authorization, and / or WATTS charges. You can also find AVS charges here (address check); valuation fees; branding fee; risk fee; settlement fees, IAS fee (issuer access and settlement).
  • Five: Third Party Fees – Third parties mean networks other than VISA and MC which are included in your statement. This would include American Express, Discover, and debit networks if you use PIN debit

Part of the problem with reading a merchant statement is the different processors to determine fees for different category names and different terms. That is why I started by saying that it might be like playing “Where’s Waldo?” Although some terms are used in common terms, they are also very different depending on the acquirer (the company you signed the dealership with).

Again, part of this is due to the attempt to conceal what is being taxed and to make it difficult for a competitor to analyze the statement. While this is “somewhat” understandable – I think it’s a priority for traders. Honesty is required transparency. Perhaps, if the processors were more trader-oriented, they would have lower turnovers and not have to worry so much about competition. At least that’s my opinion.

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